The long-term objective of our research program is to understand causes of and develop treatments for the progressive [unreadable]-cell disease that causes type 2 diabetes (T2D). Our prior work and research by others provides important evidence that metabolic effects of obesity cause [unreadable]-cell failure. Lifestyle changes and medications that alter body fat or its biology appear to slow or stop p-cell deterioration in some people, but not most. We hypothesize that substantial weight loss induced by gastric banding will be more effective than the best available medication, pioglitazone, in preserving or restoring [unreadable]-cell function. We propose a 2-arm, unblinded study to compare gastric banding to treatment with pioglitazone over a 24-month period in moderately obese Hispanic adults with pre- or mild T2D. The primary outcome will be change in [unreadable]-cell compensation for insulin resistance, which we will compare between groups. We will also examine other potential markers of [unreadable]-cell health. Secondary analyses will examine potential mediators of treatment-specific effects and look for more general mediators of [unreadable]-cell restoration or preservation. The main focus will be on mediators related to obesity. We will also examine fasting glycemia as a potential mediator of [unreadable]-cell restoration or preservation. Clinically, the project will serve as a test of concept for use of gasric banding relatively early in the spectrum of obesity and [unreadable]-cell disease. Biologically, the results will provide crucial information on potential mediators of [unreadable]-cell failure and its arrest or reversa in the context of obesity. Those mediators will guide the development of more effective treatment and monitoring for the [unreadable]-cell disease that causes T2D. We have secured agreement from Allergen to fund clinical care in the gastric band arm, so our approach is cost-effective for NIH. We bring field-leading expertise in [unreadable]-cell biology and preservation in humans. In the end, we believe we can make important new contributions to the field of T2D, as well as to the consortium that will be formed out of this RFA to advance clinical and biological knowledge in that field. PUBLIC HEALTH RELEVANCE (provided by applicant): This project is will compare two leading treatments, one surgical (gastric banding) and one medical (pioglitazone) for their impact on moderately obese Hispanic Americans with prediabetes or mild type 2 diabetes. The results will help to develop more effective approaches to treat and prevent type 2 diabetes and better ways to monitor the success of treatment. NOTE: The following critiques were prepared by the reviewers assigned to this application. These commentaries may not necessarily reflect the position of the reviewers at the close of the group discussion or the final majority opinion of the group, although the reviewers were asked to amend their critiques if their positions changed during the discussion. The resume and other initial sections of the summary statement are the authoritative representations of the final outcome of group discussion. If there is any discrepancy between the peer reviewers'commentaries and the numerical score on the face page of this summary statement, the numerical score should be considered the most accurate representation of the final outcome of the group discussion